Top News 2020 Life Science Intellectual Property Forum Theme is "How to Protect New Businesses that Use Digital Data as a Source of Value

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On February 14, 2020, the "2020 Life Science Intellectual Property Forum" was held at the Sola City Conference Center (Chiyoda-ku, Tokyo), hosted by the Pharmaceutical Manufacturers Association and supported by the Bioindustry Association of Japan. The theme of the forum was "How to protect new businesses that use digital data as a source of value: Multifaceted protection through intellectual property and contracts. The seminar featured lectures and discussions by experts representing industry, academia, and government on the industrial policy aspects. In addition to the protection and handling of the raw data of measurement results provided by users in such business models, there was a lively discussion on the secondary use of data and the protection and handling of the results obtained as a result of such use. In addition to the protection and handling of the raw data of measurement results provided by users, there was a lively discussion on the secondary use of data and the protection and handling of results obtained as a result of the use. This report provides an overview of the lectures and panel discussions.

Symbolic activities of the Japan Center include support and policy discussions for proposals made by Prime Minister Shinzo Abe at the 2019 Davos Forum on the realization of Data Free Flow with Trust (DFFT), followed by the "Osaka Track Declaration" and other proposals. The Center is engaged in projects related to data handling from various perspectives, as symbolized by DFFT, with the aim of creating a system for data utilization unique to Japan.

One of the projects I am leading is the Healthcare Data Policy Project, which is working on building a framework for preventing dementia and aging-related diseases and improving quality of life from the perspective of maximizing value for individuals and society. Some of our members are from pharmaceutical companies.

Since data related to healthcare is in principle personal information, the issue is whether or not data can be accessed for reasons of public interest, etc., even in the absence of consent. Data that exists in dispersed form will be utilized as so-called distributed databases, and standardization is essential for interoperability. Most of these data will be provided to data users as anonymized processed information, but the use of pseudonymized data is also important. Here, it is also important to ensure the reliability of the data to be integrated and the participating parties. And when new knowledge and services are provided as a result of the utilization of data, profit sharing becomes an issue.

In the area of data aggregation, several projects are currently underway to decentralize data management through Personal Life Repository (PLR), which is based on individuals. The goal is to use data distributed among many owners in a centralized manner around the individual.

We are also working on legislation for data integration and aggregation. For example, there are about 2,000 laws and regulations related to personal information, including local ordinances, and each of them has different provisions. These differences can be an obstacle to consolidating data across municipalities. This is known as the "2,000 Personal Information Protection Laws Problem.

In data provision, we believe it is important to strike a balance between the three so that the rights of individuals, companies, and the state do not become too strongly asserted.

There are many challenges in how to obtain consent from individuals. For example, there are cases where it is difficult to obtain consent from individuals, such as patients with dementia. In this connection, we are proposing "Informed Consent 2.0 (tentative). To ensure that the rights of individuals are protected, we are considering a new system in which the consent of the individual can be supported and guided by experts and AI, and in cases where it is difficult to obtain consent in person, a third party can provide support such as consensus building and proxy consent.

Finally, we introduce a mechanism called Authorized Public Purpose Access (APPA), which facilitates access to personal data. On the basis of public interest, we are studying cases in which personal data can be accessed without the consent of the individual, and published a report in January 2020. Specifically, the report deals with handling in the event of a disaster or pandemic (a global pandemic of an infectious disease). Determining the balance between the public interest and the rights of individuals is difficult, and we are considering, among other things, allowing access to data after a review by a third-party committee.

Regarding market analysis, the market overview of digital health is the same as the framework for IoT in general, and can be organized in the same way, starting with data collection, followed by data storage, processing, analysis, and services. Health checkup data and wearable devices collect vital data, and data is collected in the cloud for timely visualization. The medical information collected in this way will be analyzed as big data using AI, etc., and the business will be expanded to new services using smartphone applications, etc.

The first is the ability to continuously and timely collect and visualize data related to biological reactions in daily life, which has been difficult to obtain until now with wearable devices, etc. The second is the centralized collection of medical data in the cloud, etc., which will enable the related institutions to improve their operational efficiency. The third is the ability to analyze the aggregated medical information as big data to discover new market needs, etc. The fourth is the significance of expanding the base of business through new services such as applications and data. The fourth is the significance of expanding the base of business through new services such as apps and data. The IoT of medical devices and the expansion of possibilities to utilize big data will enable pharmaceutical companies to search for new drugs, improve the efficiency of clinical trials, and increase the number of patients they can target. In addition, the introduction of AI is expected to significantly shorten the cost and duration of basic research, particularly the period of basic research.

Next is intellectual property analysis. The market is characterized by the fact that everything is connected to the Internet, business is moving from hardware to software, and growth is rapid. In addition, being connected to the Net will increase global competition. And since platformers dominate the market, there is a limit to what you can do with your own patents alone. Entry into other industries will occur easily, and the environment will change drastically in the life science business in the form of intensified competition. It will be necessary to respond to such global competition, to consider ecosystems and alliances, as well as to deal with different industries. In addition, an open-close strategy for intellectual property based on these factors will be necessary. Until now, pharmaceutical companies have basically focused on a monopoly-sharing model in which technologies are patented. However, when it comes to digitalization, it is necessary to consider not only alliance strategies, but also IP strategies such as open strategies from the perspective of what kind of technologies to allow other companies to use, and the construction of ecosystems and their protection and utilization. Since alliances are key, it is necessary to consider IP strategies that take partners into account. If you are building an ecosystem as a higher level player, you need to think about an IP strategy to protect the entire ecosystem. If you are on top of a platform as a lower layer, you need to think about how to protect your IP when you collaborate.

One point of interest in the patent macro-analysis is the sheer number of patents on the platform. There are approximately more than 100,000. This area is the so-called open area, which gradually becomes a shared area, and the more open the area is, the more patent applications tend to be filed. In particular, there are many patent applications related to artificial intelligence and wearables. By technology and country, we can see that U.S. IT companies are ahead in the application area. Similarly, U.S. and European companies are also ahead in IoT platforms, with Japanese companies lagging behind.

Looking at the data on intellectual property trends in the digital health field, it should be noted that many patents related to middleware and cloud computing, analysis, and platforms are being filed, followed by those related to applications and services. In terms of global applications, the U.S. and China are the top two countries, and these two countries are the main battlegrounds for IP in digital health solutions.

As for the future direction of data health, we are thinking in three phases, from Phase 1 to Phase 3. First, Phase 1 is value-added and efficiency-enhancing solutions for operations; Phase 2 is the transition to the fusion of collected data and its use in strategies, for example, collecting health data, establishing platforms, and integrating various medical data are predicted. Further ahead, research and development is expected to progress to the achievement of personalized medicine, which is Phase 3. Looking at the growth rate of patent applications, the number of Phase 1 patents was 6,500 in 2018, a growth rate of 185%, and Phase 2, the area of the future, is growing rapidly with an application growth rate of 260%.

To summarize the above, first, IP strategy in IoT requires not only a traditional closed strategy but also an open strategy with an awareness of the ecosystem, because the business environment is changing so dramatically, Second, patent application strategies in IoT need to consider the shift of business models from sell-out to recurring and even to subscription models. In addition, the ratio of software will increase along with the shift to cloud computing, so it is necessary to reconfigure the patent portfolio. In particular, since the cloud domain is an open domain, patent applications will increase. I think we should consider risk countermeasures for these points.

In terms of solution trends in digital health, companies that acquire/utilize personalized data amid the increasing individualization of medical care are tending to solve issues in each phase of medical care and provide high value-added services by utilizing more developed solutions for data collection and analysis based on IoT/AI technology. The trend toward adding value to services and solving issues in each phase of healthcare is seen. In the future, the importance of data will increase as companies tend to use the collected data to help healthcare providers manage their business.

The IP trends in digital health are such that the top players in the healthcare x IoT and AI areas are both dominated by IT companies, not the pharmaceutical industry. That is another point to keep in mind when considering future IP strategies.

In May 2019, the gene panel testing system, which is the basis of genomic medicine for cancer, was covered by insurance. This means that everyone in Japan, which has a universal health insurance system, will be able to take this test equally. At present, rather than rapid progress in genomic medicine and treatment, it is at the stage where the tests for such treatment are now available. The test will be conducted on cancer patients who have no standard treatment or have completed standard treatment, and after discussions by experts based on the test results, it will be possible to propose the most appropriate treatment, for example, to enter clinical trials for new drugs. Currently, the "Cancer Gene Panel Test" pamphlet has been prepared to make it easier for patients to understand the two treatment options, "molecular targeted drugs" or "immune checkpoint inhibitors," and to ensure that they do not expect too much.

The current cancer genome medical system in Japan consists of 11 core hospitals for cancer genome medicine, 34 base hospitals for cancer genome medicine, and 122 cooperative hospitals for cancer genome medicine, all of which send patient specimens to clinical laboratories. C-CAT evaluates the significance of the genetic mutation and sends a report called C-CAT Survey Results to the hospitals within three business days. The results are then sent back to the hospital within three business days for use in treatment after an expert meeting. When obtaining consent from patients, we explain in advance that the C-CAT survey results will be generated and that the test data will be stored in the C-CAT database.

The C-CAT survey results include not only a list of cancer gene mutations, etc., but also public information such as information on related clinical trials. The information on clinical trials is updated once a month so that the latest information can be obtained.

The results of these gene panel tests can lead to the possibility of off-label use of existing drugs when a genetic mutation is found. At the National Cancer Center, there is a means for off-label use of drugs provided free of charge by drug manufacturers through the patient-directed therapy system. If the drug is approved, patients can receive treatment by paying a research fee of 400,000 yen. Currently, treatment is available for nine drugs, and the system is scheduled to be expanded to the National Cancer Center Hospital East and other core hospitals for cancer genome medicine in the near future. If pharmaceutical manufacturers agree to provide their drugs free of charge in this way, we believe that there is a possibility for further expansion of treatment.

Regarding informed consent, the aforementioned committee members from the core hospitals for cancer genome medicine have held discussions and decided on the policy. For the gene panel test, data will be provided to domestic and foreign companies and academia for secondary use after receiving consent from the individual as to whether the data will be allowed to be provided by C-CAT to a third party, and after approval by the Information Utilization Review Committee. The results of a questionnaire survey conducted by the Ministry of Health, Labour and Welfare (MHLW) show that the percentage of respondents who agreed to register their data with C-CAT and to allow secondary use of their data was extremely high at 99.3%. On the other hand, the percentage of cases in which the results of gene panel tests are linked to treatment or drug administration is only about 10%. We believe that for effective utilization, it is necessary to accumulate data in C-CAT on an ongoing basis. When accumulating data, the physician in charge must enter information on a very large number of items, and we believe that data accumulation is the result of the physician's efforts.

The direction of appropriate and effective utilization of C-CAT accumulated data is currently under discussion, with the goals of creating a cloud for data utilization, opening a data search site, and launching a C-CAT cloud for analysis of raw genomic data in 2020. The basic policy for secondary use of C-CAT-accumulated data is to charge a fee for disclosing the data to a third party (e.g., about the same as the fee charged by a biobank), to charge a fee for the use of the data, and to charge a fee for the use of the data. The basic policy of secondary use of C-CAT-accumulated data is to charge a fee (e.g., about the same as the fee charged to biobanks) for disclosing the data to third parties, the results and intellectual property resulting from data use belong to the data users, and transfer of data to third parties is prohibited.

Recently, research using real-world data has become a hot topic. In the United States, it has been reported that the effectiveness of biomarkers of therapeutic drugs can be demonstrated based on real-world data from electronic medical records, as shown in a 2019 Journal of the American Medical Association (JAMA) article.

Although the data aggregation to C-CAT has just started, we expect that research and development and surveys utilizing the aggregated data will lead to the discovery of new treatment methods and new indications for drugs in the future.

In OMRON, the healthcare business accounts for approximately 20% of the total business, and approximately half of the business is control devices such as sensors and controllers, and factory automation (FA) systems. OMRON focuses on the three domains of factory automation, healthcare, and social solutions, and is concentrating on the social systems business in order to identify and provide value to society's "problems" and "issues. OMRON HEALTHCARE is in charge of the healthcare business, and its intellectual property team is in charge of day-to-day intellectual property activities, including personnel exchanges, in cooperation with our Technology & Intellectual Property Division.

First, let me introduce our business related to IoT. In 2016, OMRON launched the concept of "i-Automation!" consisting of three "I "s: integrated (control evolution), intelligent (intelligence), and interactive (new cooperation between humans and machines). integrated (control evolution) is a concept that enables high-speed, high-precision machine control at manufacturing sites by combining OMRON's industry-leading lineup and software, The "intelligent" concept uses AI and IoT to control all types of equipment at the manufacturing site to maintain high quality without stopping or producing defective products. Interactive (new cooperation between humans and machines) is a concept where machines work autonomously and together with humans. We believe that new manufacturing and new services can be created through mutual cooperation between people and machines. In the field of factory automation, we are developing a service called i-BELT in response to changes in the IoT.

In the area of healthcare, we are moving toward personalized medicine and have three pillars of business: cardiovascular, respiratory, and pain management. In addition, we are conducting research and development aimed at "zero events" to prevent serious diseases such as stroke and cerebral infarction, for example, by realizing measurements that were previously difficult to make with innovative sensing devices. at the end of 2019, we will launch a wristwatch blood pressure monitor, which will help us shift from "measure" to "monitoring" to We are realizing the change.

As for the Social Systems business, our business is based on the experience we have gained in railroads and transportation systems. We are also participating in the Data Distribution Promotion Council, which was established at the end of 2017 with over 100 members to connect data that is in the world but not being effectively utilized. This is an initiative to promote effective data while making use of it together.

Next, I would like to talk about intellectual property activities. Now, each component is networked, and each component is connected to each other. The business structure is changing in the direction of increasing opportunities to provide value in this range.

In the world of healthcare as well, our strength is our abundant compo group, even before we are ready to respond to the IoT. It is obvious, but we believe it is important to pursue this strength first and foremost.

For example, since the healthcare business is a B to C business, we place a great deal of emphasis on design in our development. In recognition of such efforts, OMRON HEALTHCARE received the Intellectual Property Merit Award, and its design rights were recognized in the National Commendation for Invention.

More recently, our electronic thermometer was recognized by the Japan Patent Office as a "three-dimensional trademark" in the form of an electronic thermometer. This means that we are pursuing our strength of composites, and we will protect this by making full use of our design and trademark rights, not to mention patents.

The business model in the digital health field is to collect various types of data by providing excellent services to patients, who are our customers, and to use the collected data to provide new services. This will be used as a driving force to encourage individual patients to change their behavior, and as an outcome, a cyclical model will be constructed to lead to the advancement of medical services. In this model, the promotion of innovation through the utilization of intellectual property is expected to be the driving force for the realization of a sustainable society.

The current pharmaceutical IP strategy is technology-driven, with patent applications and rights granted at appropriate times in research and development to protect products. A small number of patents, such as substance patents, ensure that the product is protected for a certain period of time to recoup the investment. On the other hand, in the digital health field, a demand-driven business model is possible in which the company's core technology (intellectual property) is complementarily connected to the technologies of others via cloud databases to ensure competitiveness by being aware of consumers. In such a new business model, intellectual property can be considered as one of the tools for making friends (appealing the uniqueness of technology, business alliances, etc.), unlike the traditional approach of securing product exclusivity period through patents (e.g., the "own-ownership" principle). The targets of IP protection in digital health include data collection devices and systems/user interfaces in the data provision scene, data and databases in the data collection scene, and results of secondary use of data in the data utilization scene. As Mr. Kono mentioned in his presentation, I feel that the ownership of these rights is an issue that will have to be discussed in the future.

Let us consider the issues in IP protection for digital health. IP protection related to data and databases requires multifaceted protection from various aspects because the requirements for protection or the content of rights differ depending on the underlying laws (patent law, copyright law, unfair competition prevention law, contracts, etc.). Unlike the conventional approach of protecting products with a small number of patents, in the IP protection of digital health, there are various options for IP rights that can be utilized to enhance the competitiveness of core technologies, and it is important to obtain rights by combining them because of the different requirements. Another issue is the effectiveness of the rights. For example, if a service is provided through a cloud database, it may be difficult to ascertain the actual use of the patent.

One example of a way to solve these issues is a data stream patent that protects data formats circulating on the Internet. With a data stream patent, it would be easier to detect the domestic implementation of the patented invention by others, even if the database and server are located overseas, for example. Another solution is to obtain rights as a business method. In addition, the user interface may be protected by design.

In protecting IP in digital health, it is important to consider the balance between protection by intellectual property and use of data. The data that is the source of value in the digital health business is collected from patients, medical institutions, and many other stakeholders, and in its utilization, it is necessary to pay attention not only to the protection of personal information but also to fair use, accountability to stakeholders, and transparency. In addition to the protection of personal information, fair use, accountability to stakeholders, and transparency must be ensured in its utilization.

In summary, digital health, a new business model for many pharmaceutical companies, involves many stakeholders including patients, medical institutions, and IT vendors. By building good relationships with stakeholders and promoting the industry through appropriate intellectual property protection, it is expected to contribute not only to the improvement of patients' health but also to solving social issues toward the "Sustainable Development Goals. On the other hand, in the digital health field, a business model that strikes a good balance between monopolization by intellectual property rights and free use of intellectual property rights among related parties is considered necessary. There are still many issues to be resolved in order to realize what I have introduced today, but I look forward to working together with you to find solutions.

Regarding the digital part, many of the players that support digital health are venture companies. We believe that there are two approaches to digital health: one is to create rules, and the other is to build on best practices. For rules, we are considering training and certification. With the cooperation of the Japan Electronics and Information Technology Industries Association (JEITA) and the Japan Association of Healthcare Information Systems (JAHIS), we are providing training for newcomers to healthcare IT. Certification is currently under consideration. We also believe that cooperation with healthcare professionals will be very important, but from the perspective of healthcare professionals, the problem is that they do not know who is a reliable partner, and from the perspective of private companies, they do not understand complex healthcare laws and regulations. We believe that these issues need to be approached carefully.

We are focusing on diabetes as an area where digital health can be easily introduced and where the economic impact is significant. With the cooperation of doctors from the Japan Diabetes Society, patients themselves can gain awareness through the app and improve their exercise and diet to prevent diabetes. On the other hand, doctors expect to be able to provide exercise guidance and diet improvement by obtaining information on patients' daily activities. We would like to take on the challenge of utilizing digital data in healthcare not only for diabetes but also for a variety of other disease areas. For example, a wearable device could be used to help determine medication for Parkinson's disease. We believe that it will be important to take an approach that will lead to incentives by examining this together with the medical community and having the medical community perceive the benefits.

Furthermore, we believe that it will also be important to consider how to utilize the data obtained. Personal Health Records (PHRs) are currently the focus of attention. This PHR refers to daily health information and medical checkup data rather than medical information, and ideally, it should be used in conjunction with each individual. We are currently holding a study group for this purpose.

We believe that even those who do not have digital technology can create digital health solutions by collaborating with digital platform providers. We are looking for players who are willing to collaborate with the many digital platform providers in Asia. We are also creating a Healthcare Innovation Hub, a hub for startups, which we hope will be a one-stop shop for matching investors with major Japanese healthcare players, introducing them to government regulations, and resolving gray areas.

We conducted the Future Innovation Working in 2019 and compiled a report. By using digital, AI, and other solutions, we are aiming for a networked healthcare where patients can also approach physicians and more people can be incorporated interactively and through various communities such as social networking sites.

What kind of value and services will be created from what kind of data specifically? What businesses can be protected by IP?

With the launch of C-CAT, the task of transferring necessary information from medical records to templates arose. The physicians who are responsible for this work had a relatively limited view of the benefits of using this information for writing papers, applying for approvals, and making diagnoses, but after listening to today's discussion, I realized the possibility of creating a wide range of new services other than medicine (drug discovery, biomarker search, diagnostic drug development, etc.), depending on the side that utilizes the data. I felt the potential to create a wide range of new services other than medical care (drug discovery, biomarker discovery, diagnostic drug development, etc.) depending on the side that utilizes data.

From the healthcare device side, the way of handling data will differ depending on whether the data being handled is medical data or data outside of it (e.g., lifestyle patterns). Also, protecting the data itself is difficult. I think it is necessary to consider mechanisms for utilizing such data, such as anonymization and pseudonymization.

In the case of pharmaceutical companies, data utilization in healthcare needs to be considered on a worldwide basis. It must be noted that the way anonymized data is handled and whether or not it can be transferred overseas differs from country to country. As for the utilization of intellectual property, pharmaceutical companies would be grateful if the trend is that the rights belong to the users (as in the case of C-CAT).

How are IP and business connected in this field? What are the international trends?

Many patents have been issued for individual solutions (e.g., health promotion) that utilize data (e.g., activity volume and exercise intensity). Such patent information can provide hints as to what kind of solutions should be considered in the future. As for data, the only way is to protect it by contract. Pharmaceutical companies provide data to app companies to create applications. Conflicts can arise between the app company, which wants to use the data provided to develop a solution and deploy it laterally, and the pharma company, which wants to keep the deliverables to itself. It is necessary to consider how to create a win-win relationship between the two parties through care (e.g., profit sharing like GE) to prevent such a situation from occurring.

How are IP and business connected in this field? What are the international trends?

When it comes to digital health, digital therapeutics is making significant progress in the U.S., but in emerging countries, there is a strong need for solutions to solve local healthcare delivery system problems, such as telemedicine. Where should Japanese companies target in this area? What are the incentives for prevention? In order to find solutions to these questions, there are many difficult problems in how to design (monetize) business models outside of insurance reimbursement. As for how to involve new players, some companies are not only commercializing and servicing their own technologies, but are also taking on the role of investors, such as Corporate Venture Capital (CVC), so it is important to consider how to match players across national borders and how to expand into overseas markets. I believe that as a country, we can make a contribution to player matching and to how to capture overseas markets. In order to link medical information horizontally, in addition to legal issues related to the protection of personal information, there is the issue of how to standardize medical information and how to link it with overseas information. I think it is necessary for the government to work closely with industry associations on this part.

What kind of data platforms are being formed internationally, and what kind of businesses are operating on them? How should Japan be involved in this field in the future?

We define a platformer as one that provides a place for many players to gather: Google and Amazon provide the computing infrastructure, and IBM and GE provide the application development platform (software) on top of that. Mercari, for example, is a platform that provides payment functions (apps) on top of the infrastructure.

Platforms have an infrastructure base, a development base, and a hierarchy of applications on top of the infrastructure base. There is no protection or intellectual property in the information; if you acquire an electronic health record company, you get patient information. Even if data distribution among trusted members is open, it does not mean that everyone can get on an open platform. It is a hurdle for a pharmaceutical company to play a part as a platformer, and one direction is to partner with a platformer.

Pharmaceutical companies are lagging behind IT companies when it comes to digital health. They are using both acquisitions and partnerships to catch up and enter the market. Acquisitions are closed areas of differentiation and capture areas of strength. Partnering is a collaborative area, leveraging an IT firm's technology to efficiently develop applications.

Questions and answers from the audience
What do you think about the acquisition of companies that own clinical data?

The acquired company's data is available for its own use, which is a possible story.

Within the privacy law, acquisitions and outsourcing are not third-party provision, but a smooth transition. We are discussing stopping at the acquisition stage, cross-border data transfer regulations, and stopping data if it is not in a trusted foreign country. Contract Research Organizations (CROs) are outsourced and often do not collect for themselves. There are issues about how much they can use to improve their own services. We think that we can use the data freely because the data companies have anonymized it, but we cannot say that we can use the data without consent without confirming that the medical data has been anonymized. Even in cases where data can be used without consent, we are discussing the use of data in a way that guarantees patients' rights.

Closing Remarks

Expectations are rising for new business through the use of healthcare data. It is difficult to protect new business, partly because it is data, and partly because we have to think about contracts regarding data. I hope to see an ecosystem where data is better utilized for the world's benefit and leads to sound business.

(Intellectual Property Forum Preparatory Committee)

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